I have been a CPA for over 30 years focusing on taxation. I have extensive experience with partnerships, real estate and high net worth individuals.
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Charitable Acknowledgment Requirement is Absolute

In compliance matters, there are some things that you cannot emphasize enough. One of them is that for donations over $250 you need a contemporaneous acknowledgment from the charity with language in accordance with the regulations. This Chief Counsel Advice emphasizes how absolute that requirement is:

Does a donor who discovers that he failed to obtain a contemporaneous written acknowledgment under section 170(f)(8)(A) meet the requirements of section 170(f)(8) if the donee subsequently files an amended Form 990 for the year of contribution for purposes of attaching a statement to the Form 990 that includes the information required by section 170(f)(8)(B)?

Amending a 990 is going to a good bit of trouble so I suspect the donation must have been large by the lights of that charity. How they failed to send him a nice letter that indicated that they hadn’t provided him any goods and services (other than intangible religious benefits) in exchange for the donation is a little mysterious. Going to all that trouble, however, is of no avail having failed to go to a little trouble when they should have. Here is the part of the statute that made them think about amending the 990:

Substantiation not required for contributions reported by the donee organization. Subparagraph (A) shall not apply to a contribution if the donee organization files a return, on such form and in accordance with such regulations as the Secretary may prescribe, which included the information described in subparagraph (B) with respect to the contribution.

In discussing the regulations that were issued in response to the enactment of the substantiation requirement:

…..the Secretary noted that section 170(f)(8) authorizes the Secretary to prescribe regulations allowing donee organizations to satisfy the requirements of section 170(f)(8) by filing a return that includes the information described in section 170(f)(8)(B). However, the Secretary stated that the “IRS and Treasury have decided not to implement this suggestion at this time. However, in an effort to reduce paperwork and taxpayer burdens, the IRS will examine whether any existing IRS forms can be modified to assist in their use in substantiating charitable contributions.”

That was in 1997. Guess what ?

To date, the Secretary has not identified any existing forms for donees to use in connection with section 170(f)(8)(D). Because the Secretary has chosen, as documented above, not to provide for donee reporting under subparagraph (D), taxpayers cannot satisfy the requirements of section 170(f)(8) with a Form 990 or any other Form filed by the donee under subparagraph (D).

So make sure you get an acknowledgement from the charity if you want a valid deduction. Charities if you want happy donors make sure you send one. Accept no substitutes. The IRS won’t.

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